Let them eat semaglutides

Posted On By Blair Fix

Let them eat semaglutides

March 22, 2024

Originally published at sbhager.com

Sandy Brian Hager

Reading in the latest FT Weekend about NovoNordisk’s recent moves to corner the market for weight loss drugs, I was reminded of an eye-opening article from Rana Foroohar late last year.

In that piece, the always-sharp Foroohar discusses the emergence of new blockbuster drugs known as semaglutides. These are weight loss medications that slow digestion and repress appetite. Studies show that they lead to a 15 to 20 percent reduction in weight, and in turn, significantly cut the risk of diabetes and cardiovascular disease.

Foroohar notes that in the US, where three-quarters of the adult population is obese, prescriptions for semaglutides are up 300 percent since 2022. But it’s not just the clinically obese that are taking them: they have become a preventative fix for prediabetic patients, a staple in the beauty regime of Hollywood stars, and a part of the psychiatrist’s treatment toolkit to counteract weight gain associated with the anti-depressants they prescribe. Bank of America estimates that 48 million Americans (ca. one-seventh of the US population) will be on semaglutides by 2030.

One thing that stood out in the article is the significant redistributive effects that these drugs have had on corporate valuations. It isn’t surprising to hear that pharmaceutical companies that have developed their own semaglutides, NovoNordisk and Eli Lilly, have seen their share prices soar, while the share prices of those without semaglutides in their pipeline, Pfizer and Moderna, have fallen. But it is surprising to see just how far this disruption spreads to other sectors. Krispy Kreme has been the victim of a downgrade, food and beverage stocks like Mondelez and Pepsi Co have seen periodic sell offs. The reason? Investors and analysts fear the effect of weight loss drugs on America’s famously sweet tooth.

These intra-corporate redistributive dynamics should make us think twice before talking about the collective interests of capital, or even the collective interests of large corporations.

As Foroohar points out, the new craze for weight-loss drugs does nothing to address the underlying causes of obesity, an epidemic she attributes to farm subsidies, suburban sprawl and car culture. To this, I would also add the mental health crisis, especially the scourge of depression, which is inextricably linked with obesity. In neither case are the underlying causes addressed. As mentioned, one-seventh of the US population will soon be on semaglutides. One-eight of the US adult population is already on anti-depressants. Feeding depressed people pills that make them gain weight, only to turn around and feed them some more pills to lose weight. This absurd loop of dependency doesn’t lead to any transformative healing. But it is lucrative for the companies that design and maintain it.